Uwa Printers (Nig) Limited Vs Investment Trust Company Limited (1988)

LawGlobal-Hub Lead Judgment Report

WALI, J.S.C.

In 1976, the plaintiff company contacted the defendant company for a loan of N420,000.00 to set up a printing factory. At the request of the defendant company, the plaintiff company submitted a feasibility report. As a result of this report the defendant company offered to grant

to the plaintiff company a loan of N420.000.00 for the venture subject to the conditions stipulated in the offer.

The offer was accepted by the plaintiff and after satisfying all the conditions stipulated therein, the defendant refused and failed to honour its own side of the obligations. As a result of that breach the plaintiff, as per its paragraphs

18 and 19 of the statement of claim in an action filed in the High Court of Justice Calabar. claimed against the defendant company as follows:-

“18. In consequence of the matters aforesaid, the Plaintiff has been unable to fulfil several orders from customers and has lost the profits which it might otherwise have derived from and has been greatly injured in its trade and it has hereby suffered loss and damage.

PARTICULARS OF DAMAGE

SPECIAL DAMAGE

1. Fees for Feasibility Study Report…N2,000.00
2. Appraisal Fee… 2,100.00
3. Stamp duties on increased share capital…2,850.00
4. Filing fee – increased share capital 85.00
5. Solicitor’s charges…700.00
6. Insurance premium…2,757.40
7. Cost of factory building…335,150.00
8. Security cost from September, 1978 to

February, 1980 (18 months) 1, 080.00

9. Valuation by Otu Udofa & Partners. 2, 700.00

9(a) Stamp Duty on Legal Mortgage. 2, 720.75

9(b) Sundry Expenses…2, 080.75

10. Loss of profit from April, 1978 to date

at N322,838.04 per annum as per the

document entitled “Uwa Printers (Nigeria) Limited.”

45,676.08

TOTAL …N1, 000, 000.00

GENERAL DAMAGE

General Damage N1, 000, 000.00

19 WHERE-UPON the Plaintiff claims against the Defendant the sum of N2,000,000 being damages for breach of contract entered into in 1977 by the Plaintiff and Defendant.”

At the end of the trial, the learned trial Judge made among other findings, the following:

1. “That there was a contract is admitted and indeed cannot be denied because of the overwhelming supporting evidence. See the evidence of the P.W.1 produced above plus the evidence of the D.W.1.”
2. “All the pleading and subsequent submission on Waiver, Novation and Variation inferred from the pleadings are quite attractive but I found as a fact that the defendant by its conduct had consented to them. As a matter of fact the Plaintiff got the Defendant fully involved at every stage in his desperate bid to produce exercise books.”
3. “The overwhelming evidence in this case is that the original parties were never effectively replaced by any

other party. The defendant’s obligation to the Plaintiff was therefore never extinguished. As a matter of fact, both attempts at Novation failed. The attempt to get the Barclays Bank to lend the money collapsed. Likewise the attempt to get Spicers to commission the machine flopped because the Defendant could not make the necessary payment. (See again the evidence of the P.W.8 -S.O. Ashara) I must likewise find as a fact that both attempted arrangements towards either novation or variation of the contract still remained the only agreement enforceable between the parties. There is no other evidence before me to show that the Defendant even had any intention whatsoever of lending the said money,”

4. “(2) In cases of breach of contract the aggrieved party is only entitled to recover such part of the loss actually resulting as was at the time of the contract reasonably foreseeable as liable to result from the breach.”

He finally awarded the plaintiff damages and costs as follows:

1. Special Damages – N999,900.00
2. General Damages – N500,000.00
3. Costs – N2,000.00″

The Defendant company, being aggrieved by the trial Court’s decision, lodged an appeal in the Court of Appeal, Enugu Division which partly allowed the appeal and reduced the damages and costs awarded to the plaintiff from N1,499.900.00 and N2,000.00 to N41,992.75 and N1,000.00 respectively. The plaintiff has now appealed to this court against the judgment of the Court of Appeal. Before delving into the merit and demerit of this appeal, and

for the purpose of appreciating the cases presented by the plaintiff and the defendant respectively, I find it pertinent to reproduce some paragraphs of their respective pleadings, I consider relevant.

In the following paragraphs of plaintiffs final amended statement of claim, these averments were made:-

“2. Sometime in the year 1976 the Plaintiff contacted the Defendant for a loan to finance the establishment of an Exercise Book Factory. The Defendant asked the Plaintiff to submit a report on feasibility study of the project and in consequence the Plaintiff remained the services of I.E. UBOH & Co., Chartered Accountants, who prepared a Feasibility Report for the Plaintiff. The Plaintiff duly submitted this to the Defendant.”

“3. By a letter dated July 5, 1977 reference T/MS/15/Vol.1/77 from the Defendant to the Plaintiff, the Defendant approved a total investment to the sum of N420,000 for the Plaintiff.”

“5. The Plaintiff duly communicated its acceptance of the Defendant’s offer to the Defendant by letter dated 31st of August, 1977. The Plaintiff paid to the Defendant at the request of the Defendant the sum of N2,100.00 as appraisal fee -by cheque Mercantile Bank Cheque No.922291 of 28th of October, 1977 Reference Letter UPL/L/419 of the 28th of October, 1977.”

“8. The Defendant did not release the said sum of N420,000.00 to the Plaintiff or at all despite repeated demands and as an interim measure pending the release. the Plaintiff with the consent of the Defendant approached

Barclays Bank of Nigeria Ltd. for facilities to enable the Plaintiff to operate. By letter T/MS/15/1 of the 19th of

April, 1978 referred to in paragraph 4 above addressed to the Bank, the Defendant recommended the Plaintiff for such facilities and the Defendant confirmed to the Bank that the Plaintiff had satisfied all the ‘necessary conditions for our release of the loan”

“9. The bank did not grant the loan but the Plaintiff made calls on other shareholders and the Plaintiff proceeded with the erection of the factory building at Eket at the total cost of N335,150.00.

The Plaintiff shall at the trial rely on the Inspection, Survey and Valuation Report by Agwarramgbo, Otu Udofa & Partners.

“10. The Plaintiff had earlier made enquiries with Spicers Nigeria Limited for quotations for an Exercise Book Making Machine – and when the Defendant approved the Investment as aforesaid the Plaintiff passed the quotations and information from Spicers Nigeria Ltd. to the Defendant.

When the Bank would not grant facilities to the Plaintiff the Defendant in its letter dated the 26th of August, 1978 addressed to Spicers instructed the latter to release the Machine to the Plaintiff and the Defendant undertook to pay the money directly to Spicers. By a letter dated 31st August, 1978 addressed to the Defendant with a copy to the Plaintiff, Spicers Nigeria Ltd., agreed to release the machine to the Plaintiff and Spicers actually delivered the machine to the Plaintiff’s factory building within a few days of their letter.

On delivery, Spicers demanded part payment from the Defendant (this was a condition contained in the quotation) before the machine would be installed, but the Defendant failed and/or neglected to pay the same or at all and the machine has remained idle in the Plaintiff’s factory building ever since.”

“13. On the 9th of January, 1979 the Defendant wrote to Spicers and still lamented its inability to pay for the machine because of the high liquidity position in the country. Spicers wrote a reply to the Defendant dated the 13th of July, 1979 and on the 8th of August, 1979 the Defendant again wrote to Spicers saying that its cash position had not changed. These letters arc also referred to in paragraph to above.

“14. The Defendant has still refused to pay the money due under the Contract constituted by the letters dated 5th July, 1977 and 31st August, 1977 to the Plaintiff or at all and has thereby committed a breach of the said contract.””17. The Plaintiff has in consequence suffered considerable damages arising from the refusal of the Defendant to discharge its contractual obligation resulting in a flagrant breach of contract by the defendant.

“18. In consequence of the matters aforesaid, the Plaintiff has been unable to fulfil several orders from customers and has lost the profits which it might otherwise have derived from and has been greatly injured in its trade and it has hereby suffered loss and damage.

PARTICULARS OF DAMAGE

SPECIAL DAMAGE

PARTICULARS OF DAMAGE

SPECIAL DAMAGE

1. Fees for Feasibility Study

Report…N2,000.00

2. Appraisal Fee…2,100.00
3. Stamp duties on

increased share capital…2,850.00

4. Filing fee – increased share

capital 85.00

5. Solicitor’s charges…700.00
6. Insurance premium…2,757.40
7. Cost of factory building…335,150.00
8. Security cost from September, 1978 to

February, 1980 (18 months). 1, 080.00

9. Valuation by Otu Udofa & Partners. 2, 700.00

9(a) Stamp Duty on Legal Mortgage. 2, 720.75

9(b) Sundry Expenses…2, 080.75

10. Loss of profit from April, 1978 to date

at N322,838.04 per annum as per the

document entitled “Uwa Printers (Nigeria) Limited.”

645,676.08

TOTAL…N1, 000, 000.00

GENERAL DAMAGE

General Damage N1, 000, 000.00

19. WHERE-UPON the Plaintiff claims against the Defendant the sum of N2,000,000 being damages for breach of contract entered into in 1977 by the Plaintiff and Defendant.”

The Defendant’s own side of the case is briefly portrayed in the following paragraphs of the statement of defence

“3. Paragraph 2 of the further amended statement of claim is admitted to the extent that by its letter reference UPL/S/5/5/1 dated 2/9/75 (which is hereby pleaded), the plaintiff approached the defendant for the loan, but the defendant denies vigorously any responsibility for employment of the services of I.E. Uboh & Co. Chartered Accountants who prepared feasibility report submitted by the plaintiff.”

“4. Paragraph 3 of the further amended statement of claim is admitted to the extent that the defendant wrote the said letter but the defendant avers that the letter referenced T/MS/15/Vol.1/77 dated July 5th 1977 was not an approval of a total investment of the sum of N420,000.00 for the plaintiff, but merely an intention to approve the said sum subject to the plaintiff fulfilling the terms and conditions specified in the body of the said letter.”

“6. Whilst still referring to paragraph 4 of the further amended statement of claim the defendant avers further that its letter cited in the said paragraph when read as a whole does not amount to an admission by the defendant

that the plaintiff, had at that time or at all satisfied the defendant’s terms and conditions for the release of the proposed loan.”

“12. The defendant states that the averment in paragraph 9 of the further amended statement of claim is a matter only within the plaintiffs knowledge and does not concern the defendant in any way. Accordingly, the defendant denies the averment by the plaintiff in the said paragraph in its entirety and puts the plaintiff to the strictest

proof thereof.”

“14. Whilst still on paragraph 10 discussed above the defendant states that the quotations and information from Spicers Nigeria Limited, passed by the plaintiff to the defendant as alleged, was for the information of the defendant only and was in no way collateral to the contract for the loan agreement between the defendant and the plaintiff, nor had the quotation and information anything to do with the defendant.”

“15. With further reference to paragraph 10 of the further amended statement of claim the defendant admits that

it wrote the letter dated 26th August, 1978 to Spicers Nigeria Limited requesting the latter to release one Bielomatik machine for manufacturing exercise books to the plaintiff, but avers vigorously that the letter it wrote

to Spicers Nigeria Limited was written expressly at the request of the plaintiff contained in the plaintiff’s letter NO.UPL/SJU dated 31st July, 1978 which is already pleaded herein.”

“27. The defendant vigorously denies the averment in paragraph 18 of the further amended statement of claim in

its entirety comprising the allegations and the particulars of damages both special and general.

In the alternative, the defendant avers that if, which is not admitted, the defendant has suffered any loss at all, such loss would be remote in terms of the foregoing averment of the defendant in this its further amended statement of defence (No.2), and/or would have been caused by the plaintiff’s breach of the contract between

the plaintiff and the defendant.” The notice of appeal contained 4 original grounds. With leave of this Court 3

more grounds numbers 5,6 and 7 were filed. Learned Counsel for the appellant and respondent filed and exchanged briefs, and each made oral submissions in elaboration of his brief. In his brief, learned Counsel for the appellant formulated only one issue for determination, to wit- “Whether the learned Justices of the Court of Appeal were

right in reducing the damages awarded to the appellant by the learned trial Judge from N1,499,900.00 to N41,992.75.”

Learned Counsel for the Respondent also formulated only one issue for determination which is substantially the same with the one formulated by the appellant. It reads thus:-

“Whether the Court of Appeal was justified in reducing the damages awarded by the trial Court in favour of the appellant.” In the brief of argument filed on 24th February, 1987 by Dr. Mudiaga Odje, F S.A.N., for the Respondent, he indicated his intention to raise preliminary objection to all the four grounds originally filed by the appellant that:-

Barring the particulars given in 2(a), grounds 1 and 2 and 3 of appeal involve questions of facts, mixed law and facts, whereas no leave to appeal (on them) was obtained. Ground 4 of appeal misconceived and/or abandoned.”

But before the date of hearing Counsel for the Appellant took note of the objection and filed an Application on Notice with the following prayers:-

“1. AN ORDER amending paragraph 2 of the Appellant’s Notice of Appeal dated 8th March, 1986 to include the words “and costs” after the word “damages.”

2. AN ORDER extending the time within which the Appellant/applicant can appeal against the decision

of the Lower Court on the award of costs and on issues of mixed law and facts.

3. AN ORDER granting leave to the appellant/applicant to appeal against the judgment of the Lower Court

on issues of mixed law and facts as contained in the Schedule annexed hereto.

4. AN ORDER granting leave to the Appellant/applicant to file and argue additional grounds of appeal as

contained in the said Schedule.

5. AN ORDER for accelerating the hearing of this appeal.”

All the prayers were granted on 8th February, 1988. The additional grounds were numbered 5, 6, and 7 respectively. However, Grounds4and 7 on costs (awarded by the trial Court and reduced by the Court of Appeal) were abandoned. The two are therefore struck out. The summary of the appellant’s arguments in support of the remaining grounds as contained in his brief and oral submissions can be stated thus –

That the learned Justices of the Court of Appeal were wrong in their interference with the award of –

(1) N999,900.00 as special damages made up as follows

(a) N335, 150.60 which was the cost of building of the factory at Eket;

(b) N645,676.08 being the expected profits from April, 1976 to April, 1980 at N322,838.04 per annum.

He submitted that it was with the tacit approval of the Respondent, after the contract for the loan to put up the building to house the factory at Eket at a cost of N335,150.6O in 1977 had been concluded, that the building was put up by the appellant. He referred to and relied on the evidence given by P.W.1 the Managing Director of the Appellant’s Company and P.W.3, a Chartered Surveyor and Valuer who wrote the Valuation report on the cost of the appellant’s paper factory – EX.18.

He submitted that this evidence was evaluated and accepted by the learned trial Judge and therefore the Court of Appeal was wrong to interfere with the trial court’s finding on that. He cited and relied on the following decided cases – Obere v Board of Management Eku Baptist Hospital (1978) 6-7 S.C.15 at 24 and the cases cited thereto, Omaga v Micho (1961) 1 ALL N.L.R. 324 at pp. 328-329; Ekpe v Fagbemi (19783 S.C. 91; Lawai v Dawodu & ors. (1972) 9 S.C. 83 and Kakara v Imonikhe (1974) 1 ALL N.L.R. (PART 1) 383.

In reply to the above submissions Dr. Odje, SAN, learned Counsel for the Respondent submitted in his brief that this item of claim was inequitable as the factory building erected by the appellant for its own business which is still there physically could not be regarded as a loss for which damages for breach of the contract could be claimed.

The Court of Appeal (per Olatawura, J.C.A.. in the lead judgment) reviewed the submissions for and against this claim and concluded:-“The respondent has been in printing industry before the loan was approved. The respondent cannot keep the building and at the same time ask the appellant to pay for the cost of the building. It will be inequitable. The purpose of the loan of N420,000.00 was to set up an Exercise Book Industry. Besides, there was no receipt of how this amount of over N335,150.60 was arrived at. The respondent has relied on Exh.1 in proof of the cost of the factory building. I have looked into Exhibit 1 and what appears on page 10 of Exhibit 1 under item 530 is: Building; Estimated roughly: N100,000.00 and to leave no one in doubt under item 570: Summary of Capital Estimates, Land and Buildings were estimated to cost N100,000.00.

I will say in a matter of this nature where a party makes a specific estimated claim, the onus lies on him to prove his claim. This report was signed on 1st December, 1975 long before the application for loan was made. Even if the respondent is relying on Exhibit 18 -Inspection Survey and Valuation Report, page 18 put the cost of Main Factory Block at N120,710.00. Page 21 again shows the summary of capital values. It will still be seen that the cost of the Factory Building was never estimated to be what is claimed in the Further Amended Statement of Claim. I will disallow this claim of N335,150.60k.”

I cannot improve upon the reasoning of the learned Justice for disallowing this claim. As far as the building is concerned, the appellant suffered no loss, though he was prompted to erect it as a result of the contract for the grant of a loan to build same and which was subsequently breached by the respondent. His remedy lies in the claim for general damages resulting from that breach and which would in due course be considered. The authorities cited by Counsel for the appellant, rather than support his case are totally against it since the learned trial Judge applied wrong principles of law in making the award.

The award is totally unjustified whether or not the factory was built before or after the conclusion of the contract to grant the loan. As for the award of N645,676.08, learned Counsel submitted that the Court of Appeal was wrong to interfere with the award of the amount. He argued that the Court of Appeal was equally wrong to have declared Exhibit 29 inadmissible on the ground that it is hearsay evidence. He said Exhibit 29 was rightly admitted by the trial court as it was made by an expert who based his proposed loss of profit for the periods 1978/79 and 1979/80, on the feasibility study – Exhibit 1 which contains documents headed “Projected Enrolment in Primary Class 1,1975 to 1976- 1982-83″, and Projected Enrolment in Primary Schools 1975 to 1976 – 1982-83”, and a summary of Total Demand for Exercise Books by pupils and Students in both primary and post primary schools. He supported his submissions by citing the English case of English Exporters London Ltd. v. El Donwall Ltd. (1973) 1 A.E.R. 726 at pages 730-731; Seismograph Services v Onokpasa (1972) 4 SC. 123 at 137 to 138; and Ozigbo v C.O.P. (1976) 2 S.C. 67 at 75-76 and other authorities dealing with the opinions of expert as evidence. In reply to the submissions above, Dr. Odje, SAN, for the Respondent submitted that the appellant had failed to adduce enough cogent evidence to support the claim, particularly the evidence of customers who allegedly placed orders with the appellant, from which the expected profits would have been made.

He also said that the price lists on which the projected profits of N645,676.08 were based, were obtained from information given by persons who were not called as witnesses. An expert may give his opinion upon facts which are either admitted or proved by himself, or other witness in his hearing, at the trial or are matters of common knowledge. But where the opinion is based on report of facts, these facts, unless they are within his personal knowledge, must be proved independently, that is, by calling witnesses who are personally concerned in the transaction – See Ramsdale v Ramsdale, 173 L.T. 393 and R v Somers (1963) 1 W.L.R. 1306 and paragraph 1279 – Phipson on Evidence, 12th Edition. So even if Exhibit 29 – containing the projected profits the appellant could have made on the sale of the exercise books on the projected figures of pupils in both primary and post primary schools for the years 1978/79 and 1979/80 by the Federal Ministry of Education Lagos, was by itself admissible, no one was called from the Ministry who was concerned in the production of the figures to prove the truth of those facts.

The projected figures in Exhibit 1 bear no authenticity that they were obtained from the Federal Ministry of Education. Exhibit 29 was therefore based on hearsay evidence which was reduced into writing and the learned trial Judge should have attached no weight to it, much less to rely on the same to make the fantastic award of N645,676.08 as loss of profits. The damage awarded is merely speculative. See Overseas Construction Company Ltd. v Creek Enterprises Ltd. (1985) 12 S.C. 158, and Panalpina World Transport Ltd. v Wariboko (1975) 2 S.C. 29. As contained in Exhibit 29 – Auditors Report, the calculated loss of profits the appellant would have sustained flowing from the Respondent’s inability to perform his own side of the contract was not based on any existing contract between the appellant and any other party and which was known to the Respondent.

There was in fact no evidence of any contract. The Court of Appeal was perfectly justified in disallowing this head of damage as it is speculative. The authorities cited and relied upon by the appellant are not apposite. Both grounds 1 and 2 of the Grounds of Appeal fail and are dismissed. The complaint in Ground 6 regarding the inadmissibility of Exhibits 1 and 29 on which the award of N645,676.08 as loss of expected profit by the appellant had the factory taken off, has already been covered in my consideration of grounds 1 and 2. I need not say more than that save that ground 6 has no merit and it is dismissed.

Similarly, the complaint in Ground 5 which is the same as Ground 1 for intendment and purpose, has been covered under the latter. It is nothing more than a mere duplication of Ground 1 and therefore superfluous. It is dismissed. The last complaint of the appellant against the judgment of the Court of Appeal is contained in Ground 3, to wit the reduction of the N500,000.00 general damages awarded by the trial Court to N25,000.00. The Supreme Court, in Onere v Board of Management Eku Baptist Hospital (1978) 6-7 SC. 15, which was cited by the appellant in his brief, stated the principles upon which a court of appeal can interfere with award of damages by a trial Court, thus- “The principles upon which an appellate Court will act in reviewing an award of damages are now well settled and can be surmarised as follows. An appellate court is not justified in substituting a figure of its own for that awarded by the lower Court simply because it would have awarded a different figure if it had tried the case at first instance. Before the appellate court can properly intervene, it must be satisfied either that the judge, in assessing the damages, applied a wrong principle of law such as taking into account some irrelevant factor or leaving out of account some relevant factor, or that the amount awarded is either so ridiculously low or so ridiculously high that it must have been a wholly erroneous estimate of the damage.” The reasons given by the learned trial judge for the award of this substantial damages were stated thus -“I am of the view that in this case, the plaintiff is entitled to substantial damages – at least enough to enable him pay for and own the Spicers machine already in his possession and get same commissioned so that he might commence business and terminate his losses and be no longer tied to the apron strings of the Defendant.” The loan contract concluded between the appellant and the Respondent was for the sum of N420,000.00. There is evidence that the respondent instructed Spicers Nigeria Limited to supply and install the Bielometic machine in the appellant’s factory at Eket and that the respondent was to pay for the machine. See the following excerpts from the evidence of P. W.8- “I know about the purchase of Bielometic machine by Uwa Printers – the Plaintiff. We are the suppliers of the machine. My company was to supply and install the machine to the Plaintiff and then commission it. (i.e. test run and produce exercise books from the machine). We were requested to supply the machine by the Defendant to the Plaintiff. The Defendant requested us to install it too, at Eket – where the factory was built. The instructions were by letters. This is the letter from the Defendant to us (Spicers) dated 20/8/78. I seek to tender it.

Nyong: I have no objection.

Court: The original copy of Exhibit 20 is admitted and marked as Exhibit 35.

P.W.8 – That Exhibit authorises us to supply and install and we delivered it at Eket and installed it. We informed the Defendant that it had been done. We asked them in writing to pay for the machine. This is the letter – This Exhibit 21 is the letter demanding payment. On getting Exhibit 21 they replied. This is the reply written by Defendant to Spicers dated 8/8/78. I seek to tender it.

Nyong: – I have none.

The letter is admitted and marked as Exhibit 36.

P.W.8 -We wrote again to them through Exhibit 23 dated 23/11/78.

Still they did not pay but again wrote another letter. This is the letter from the defendant – dated 9/1/79.

Nyong: No objection.

Court: The letter dated 9/1/79 – is admitted and marked as Exhibit 37.

P.W.8 – The Defendant has not paid any money to us up till date

The Defendant was to pay for the machine. The payment was to be made after commissioning of the machine. We were to deliver and install and the commissioning was to be after payment. I am aware that we are demanding our money from the Defendant and have filed a suit in the High Court. Our intention is for the Defendant to pay us so that we might commission the machine. The Defendant is to pay Spicers for the machine:’

The evidence of P.W. 8 quoted supra was confirmed by D.W.1 in his evidence wherein he said –

“Spicers delivered the machine to the premises at Eket. From what we gather from the Plaintiff – the machine was not commissioned. We wrote to Spicers. We were liable to pay.” It is clear from the evidence above that though the machine was delivered and installed in the factory, the appellant is not a party to that contract. It is between the respondent and Spicers Nigeria Limited. There was no doubt had the machine been commissioned he would be a beneficiary and the responsibility of defraying the cost of the machine would have been taken over by the appellant, or the Respondent to be reimbursed by the appellant had he paid. And as shown in the evidence Spicers Nigeria Limited had already instituted action against the Respondent to recover the cost of the machine.

The appellant, if he still wants the machine installed to be commissioned has either to pay the cost of the machine direct to Spicers Nigeria Limited or to request the Respondent to remove it from the premises of the factory. As far as this is concerned, he incurred no direct financial loss. He would be compensated by the award of damages for the breach of contract for the loan of N420,000.00, as a result of inconvenience occasioned him by such breach. The damages are not meant to covert he cost of the machine. If the reasoning of the learned trial Judge was accepted, the appellant would have been better off by not taking the loan. The damages of N500,000.00 is ridiculously high and out of proportion. The learned trial Judge applied a wrong principle in making the fantastic award. I agree with the reasoning given by the Court of Appeal for reducing the general damages from N500,000.00 to N25,000.00, and to that extent, Olatawura. J.C.A. is well justified in his judgment when he said-

“The law on damages has no defined boundary between the poor and the rich, nor is it discarded in backward countries where the same principles of law apply. The respondent claimed general damages but the court awarded substantial damages for reasons given by the Judge. I agree with Dr. Odje when he said in his brief that ‘the respondent is thus better off not getting the loan. This amount is not only an erroneous estimate but is

‘ridiculously high’, and based on a wrong principle. In coming to this colossal amount the Judge took into account the amount of the machine as shown in Exhibit 24 into consideration. The amount shown therein is N369,029.47. This is one of the reasons for that award: ‘at least enough to enable him pay for an (sic) own the Spicers machine already in his possession’. He however overlooked the evidence of P. W.8, Mr. Ashara, the Engineer attached to Spicers Nig. Ltd. -‘I am aware that we are demanding our money from the Defendant and have filed a suit in the High Court. Our intention is for the Defendant to pay us so that we might commission the machine. The Defendant is to pay Spicers for the machine.’ I will therefore reduce the amount of general damages to N25,000.00 (Twenty-five thousand Naira only).” All the grounds of appeal filed and canvassed by the appellant lack merit. The appeal fails and is accordingly dismissed with N500.00 costs to the Respondent.

A. NNAMANI, J.S.C.: I had the advantage of reading in draft the judgment just delivered by my learned brother, Wali, J.S.C. and I entirely agree with his reasoning and conclusions. This appeal is really concerned with the quantum of damages to which the appellant was entitled for it is not open to argument that the two lower courts were right in holding the respondent in breach of a contract to lend the sum of N420,000 to the appellant. I do not see what other construction can be given to the letter reference No.T/MS/15/Vol.1/77 of 5/7/77 written by the respondent herein to the appellant approving such a loan. Again on 31st August, 1977, a letter reference No.UP1/L/391 was written by the appellant herein accepting the offer. Not only were these letters written, but when the loan was not forthcoming and the appellant applied to the Barclays Bank for facilities, the respondent recommended appellant on the basis that it had approved a loan for it. At the end of the trial in the High Court, Effanga, J. awarded damages to the appellant as follows:-

Special Damages:N999.900.00

General Damages:N500,000.00

Costs: 2,000.00

The Court of Appeal in allowing the respondent’s appeal reduced the damages to N42,992.75 made up of N16,992.75 as Special Damages, N25,000 as General Damages and N1000 as costs. Hence the appeal to this Court. It is essential to remember that the appellant in its claim in the High Court had claimed N1,000,000 as Special Damages (including N335,150.00 as cost of Factory building and N648,577.60 as loss of profit from April, 1978 to February, 1980 at N324,288.80 per annum) and N1,000,000 as General Damages. My learned brother has fully considered the Court of Appeal’s reasons for rejecting the learned trial Judge’s award of damages and my comments cannot but be a matter of emphasis. Before going to the various heads of award, it may be useful to reiterate the general principles governing the award of damages in this particular type of breach of contract – breach of a contract to lend money. In his submission to this Court, learned Counsel to the appellant, Mr. Oyetibo defended

the award of damages by the learned trial Judge saying that it complied with the law and contending that the innocent party should rely on a loss following from the breach. He referred to Onaga and Ors. v. Micho and Co. (1961) All N.L.R. 324. I can only say that this case is not quite on all fours with the present case for in the Micho case the breach was breach of a contract of construction.

Learned Senior Advocate for the Respondent, Dr. Odje, on the other hand submitted that in a contract to lend money the measure of damages for breach is usually nominal. He referred to South African Territories Ltd. v Wallington (1897) 1 Q.B. 692, 695, 697. It is settled that where the breach of contract is a failure to lend money the basic loss is the difference between the terms upon which the borrower had made the loan and the terms upon which he can go into the market and effect a substitute for himself. (See Macgregor on Damages 13th Edition at page 24). In the South African Territories case (Supra) Chitty L.J. in the English

Court of Appeal stated at page 697:- “The plaintiffs are entitled to recover damages for breach of the agreement to make the loan. The damages in such a case may be large or small, or merely nominal, according to the circumstances. The measure of the damages is the loss sustained by the borrower through the breach.”

In his own opinion, Lopes, L.J. said, “On a contract to lend money, no action will lie for the money; an action will only lie for breach of the contract. The borrower may go into the market the next day after the breach, and get the money without incurring any loss, or he may not be able to get it without suffering a loss, in which case the measure of damages is the loss he suffers.” I think it would be wrong to assert that the measure of damages is nominal. It would depend on the circumstances of each case. It is more correct to state that it will flow from the loss suffered if any. Did the Court of Appeal violate these principles in its award of damages I do not think

so. It examined the heads of claim, particularly the special damages, which, it is now trite, have to be proved strictly. As regards the cost of the Factory building, the Court of Appeal referred to Exhibit 1, the Feasibility Report, rejected that claim on the basis that “the cost of the Factory building was never estimated to be what is claimed in the further amended Statement of Claim.” Besides, it seems to me too inequitable that the appellant should be allowed to claim the cost of a building which is still in its possession and which may still be used for other purposes. Then the Court dealt with the claim of N322,838.04 per annum as loss of profit. It referred to Exhibits 1 and 29 and stated as follows:- “All the projected profits are based on figures allegedly obtained on projected Enrolment in Primary Schools. The lists were said to have been obtained from Federal Ministry of Education, Lagos. The mere fact that it is in writing does not make the contents less hearsay.”

It proceeded to refuse the claim on this and other grounds. I would only say briefly that I do not share the view that the expert evidence in Exhibit 29 was hearsay and so inadmissible. Exhibit P.29 was prepared from Exhibit 1 – the Feasibility Report – which is itself an expert report. I agree with Mr. Oyetibo that the Court of Appeal’s position would make the position of an expert giving evidence impossible. The question which may properly be asked is who is an expert.

Does he sit in his room and formulate ideas or compute figures Is his evidence hearsay because it can be shown that he obtained information on which he worked from some Ministry As Mr. Oyetibo aptly put it, “No expert is an island unto himself, he must draw his conclusion from certain facts.” I think that the more acceptable reason for rejecting the claim for loss of profits was the fact that the appellant could not produce any shred of evidence of any loss of customers or loss of printing contracts as a result of this breach. In paragraph 18 of the amended Statement of Claim the appellant pleaded as follows:-

“18. In consequence of the matters aforesaid, the plaintiff has been unable to fulfil several orders from customers and has lost the profit which it might otherwise have derived from and has been greatly injured in its trade and it has already suffered loss and damage.” P.W.1 in his evidence in Chief said,

“We would have had profit from April, 1978 as computed to 1980 is N645,676.08.”

There was no evidence, as earlier stated, to support these averments and such a claim could not stand.

On the issue of general damages, the Court of appeal quoted the views of this Court as per Fatayi-Williams, J.S.C. (as he then was) in Samuel Obare v. The Board of Management Eko Baptist Hospital (1978) 6-7 S.C. 15 at 24 – in effect that the appellate Court can only intervene if it is satisfied that the learned trial Judge applied wrong principles such as taking into account some irrelevant factors or that amount awarded is either so ridiculously low or so ridiculously high. The Court of Appeal then referred at length to the views of the learned trial Judge as to what he considered the sadistic and callous attitude of the respondent.

In part the learned trial Judge said, “Here in this part of the world it is a notorious fact that people can be sadistic and can, quite callously and deliberately determine to stand on the way of someone’s progress and thwart one’s honest effort to get on in life and in business. Otherwise what reasonable explanation has the defendant got for its apathy by refusing the plaintiff a loan of only N420,000 for over a period of 5 years…I am of the view that in this case, the plaintiff is entitled to substantial damages – at least enough to enable him pay for and own the Spicers machine already in his possession…” (Italics mine)

The court of Appeal castigated the learned trial Judge reminding him that there was no boundary between poor and rich, civilized and primitive in the law of damages. While this is clearly so, the respondent, on the facts of this case, deserved all the strictures made on it, for it was indeed callous and sadistic. That unfortunately did not entitle the appellant to the “substantial damages of N1,000,000 which the learned trial Judge awarded. After all, the loan the subject of the breach was N420,000! Besides the portion underlined above shows that the learned trial Judge took into consideration a matter which was not relevant in his computation. He must have lost sight of the evidence of P.W.8 who had said, “I am aware that we arc demanding our money from the Defendant and have riled a suit in

the High Court. Our intention is for the Defendant to pay us so that we might commission the machine. The Defendant is to pay Spicers for the machine.” I think the award of N1,000,000 was excessive and inexcusable. But so is the award of N25,000 by the Court of Appeal, for that Court did not give any basis for that award. However,

I am unable to interfere for although the appellant in its relief prayed this Court,”That the award of N42,992.75 damages by the court of appeal be set aside” . There is no ground of appeal complaining specifically against the award of N25,000. If the appellant is successful, it was its wish that the N1,000,000 be restored.

For these reasons, I too do dismiss this appeal. I abide by all the orders for costs made by Wali, J.S.C.

M. L. UWAIS, J.S.C.: I have had the opportunity of reading in draft the judgment read by my learned brother Wali, J.S.C. I agree with the reasons and conclusion therein. Accordingly, the appeal fails and it is hereby dismissed.

The decision of the Court of Appeal is affirmed with N500.00 costs to the respondent.

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Other Citation: (1988) LCN/2372(SC)